Accumulate Persistent Systems, target price Rs 1149: Angel Broking

Angel Broking has given a accumulate rating to Persistent Systems with a target price of Rs 1149. The share price moved up by 6.34 per cent from its previous close of Rs 1040.30. The stock’s last traded price is Rs 1106.30.

Persistent Systems Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 8460.25 Crore) operating in IT Software sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 991.38 Crore, up 7.02 % from last quarter Sales of Rs 926.36 Crore and up 19.14 % from last year same quarter Sales of Rs 832.11 Crore Company reported net profit after tax of Rs 90.01 Crore in latest quarter.


Investment Rationale
Company has won a large deal during the quarter which will ramp up over the next few quarters. We expect the company to post revenue/EBITDA/PAT growth of 11.6%/21.4%/19.7% between FY20-FY22 given negligible impact of Covid-19 on FY21 numbers strong deal wins, ramp up of existing projects along with margins expansion.

Promoter/FII Holdings
Promoters held 31.5 per cent stake in the company as of June 30, 2020, while FIIs held 19.2 per cent, DIIs 27.2 per cent and public and others 22.1 per cent.